Tips to Get The Best Home Loan Modification Deal

Start early.
In the past, only people who were seriously delinquent or already foreclosure could get home loan modifications. However, lenders have become more lenient as government support gave them more incentive to modify loans. Starting early shows the lender that you’re responsible and determined enough to keep your mortgage on track.

Get professional help.
You may be tempted to handle the loan modification on your own to save money, but getting help from the pros can give you a serious advantage. A loan modification attorney or representative can get you in touch with the right department, help you gather the right documents, and plan your application according to your lender’s policies.

Do your research.
Most loans today are either owned by one bank or shared by many as mortgage-backed securities. Generally, sliced-up loans are harder to modify because there’s more than one entity with an interest on the loan. Find out who owns your loan by calling your lender or checking government sites like Fannie Mae or Freddie Mac.

Provide accurate information.
One of the first requirements for a home loan modification program is a hardship letter. Here, you explain why you fell behind and how you plan to get back on your feet. Lenders will need to verify all your claims, so don’t try to embellish your story. As much as possible, back it up with documents such as pay stubs, tax forms, and bank statements.

Set realistic goals.
Many lenders will offer new terms that are only slightly better than your current one. Don’t settle for a less-than-ideal deal out of desperation. A good loan modification attorney can help you negotiate more effectively and get a home loan modification program that makes financial sense for both you and your bank.

What to know before you take out a mortgage loan

You need to take out a mortgage loan if you don’t have the required cash to purchase a property. It is advisable that you know about mortgage terms and basic concepts of a home loan before you take out one. It will help you to choose a home loan that suits you the best in the long run. Read on to gather knowledge about mortgage basics.

How to obtain a mortgage
You can take out a mortgage loan from banks, mortgage companies, credit unions and portfolio lenders. You can also complete an online form and provide the necessary documents in order to apply for a mortgage.

Types of mortgage loans
There are mainly 2 types of mortgage loans, which are given below.

ARM (Adjustable Rate Mortgage) – It is a type of home loan with variable rate of interest. The interest rate remains fixed for a certain period after which it changes periodically.

FRM (Fixed Rate Mortgage) – In this type of mortgage loan, the interest rate remains fixed throughout the loan term.

Required documents
You need to provide certain documents to obtain a home loan. They are paystubs for the past 2 years, the borrower’s Social Security Number, income and address proofs along with the recent statements of deposit amounts, stocks and bonds.

Importance of credit repair
Apart from getting acquainted with various mortgage terms, it is quite important to check your credit score before you apply for a mortgage loan. If required, repair your bad credit record before applying for a home loan. You can get better interest rate on your home loan if you have a good score.

You can take help of online forums if you want to know about specific mortgage terms. You can post your query in order to get the answers from experienced professionals. It is advisable that your resolve all your queries before taking out a home loan. It will help you to choose the best mortgage.